Pub Date : 2025-12-06DOI: 10.1016/j.asieco.2025.102099
Birendra B. Budha
This paper investigates whether Nepal’s inflation converges with India’s inflation and examines the effect of India’s prices on Nepal’s price level using monthly data for the period 1974–2024. The paper finds that Nepal’s inflation converges with India’s inflation, and the effect of India’s CPI persists up to 10 months on Nepal’s CPI, and up to 22 months on Nepal’s food CPI. The mechanisms of inflation convergence include high trade integration, high labor mobility and wage convergence, and the peg of the Nepalese Rupee with the Indian Rupee. The paper also finds the convergence in wage growth between Nepal and India. These findings imply that the current exchange rate peg is working well as a nominal anchor of Nepal’s monetary policy in maintaining monetary stability.
{"title":"Does Nepal’s inflation converge with India’s inflation?","authors":"Birendra B. Budha","doi":"10.1016/j.asieco.2025.102099","DOIUrl":"10.1016/j.asieco.2025.102099","url":null,"abstract":"<div><div>This paper investigates whether Nepal’s inflation converges with India’s inflation and examines the effect of India’s prices on Nepal’s price level using monthly data for the period 1974–2024. The paper finds that Nepal’s inflation converges with India’s inflation, and the effect of India’s CPI persists up to 10 months on Nepal’s CPI, and up to 22 months on Nepal’s food CPI. The mechanisms of inflation convergence include high trade integration, high labor mobility and wage convergence, and the peg of the Nepalese Rupee with the Indian Rupee. The paper also finds the convergence in wage growth between Nepal and India. These findings imply that the current exchange rate peg is working well as a nominal anchor of Nepal’s monetary policy in maintaining monetary stability.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102099"},"PeriodicalIF":3.4,"publicationDate":"2025-12-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145737299","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-04DOI: 10.1016/j.asieco.2025.102096
Xiaosong Wang , Siyuan Tian , Yuding Zhou , Le Li
Against the backdrop of an increasingly severe global climate crisis, climate change and climate governance have emerged as critical factors shaping the global economic landscape. As nations increasingly adopt climate policies to address climate change, the uncertainty surrounding policy formulation, implementation, and potential adjustments poses new challenges to firm’s production and trade practices. This study investigates the impact of uncertainty stemming from climate policy volatility on regional import structures. Utilizing a climate policy uncertainty index constructed through deep learning models, our mathematical modeling and empirical analysis reveal that increases in climate policy uncertainty significantly raise intermediate goods imports in high-pollution industries, as reflected in both extensive and intensive margins. Multiple robustness checks confirm the reliability of the findings. Heterogeneity analysis indicates more pronounced effects in samples with higher contract intensity and more concentrated import markets. Mechanism test suggests that climate policy uncertainty drives firms toward import substitution strategies to mitigate environmental risks by increasing local production costs and reducing investment incentives. Further analysis shows that climate policy uncertainty also significantly reduces export competitiveness in high-pollution industries. Amid growing global concerns over environmental protection and climate issues, this research not only provides insights into the complex interactions between climate policies and international trade, but also offers policy implications for climate and trade policy.
{"title":"Climate policy uncertainty, environmental risk aversion, and import structure adjustment","authors":"Xiaosong Wang , Siyuan Tian , Yuding Zhou , Le Li","doi":"10.1016/j.asieco.2025.102096","DOIUrl":"10.1016/j.asieco.2025.102096","url":null,"abstract":"<div><div>Against the backdrop of an increasingly severe global climate crisis, climate change and climate governance have emerged as critical factors shaping the global economic landscape. As nations increasingly adopt climate policies to address climate change, the uncertainty surrounding policy formulation, implementation, and potential adjustments poses new challenges to firm’s production and trade practices. This study investigates the impact of uncertainty stemming from climate policy volatility on regional import structures. Utilizing a climate policy uncertainty index constructed through deep learning models, our mathematical modeling and empirical analysis reveal that increases in climate policy uncertainty significantly raise intermediate goods imports in high-pollution industries, as reflected in both extensive and intensive margins. Multiple robustness checks confirm the reliability of the findings. Heterogeneity analysis indicates more pronounced effects in samples with higher contract intensity and more concentrated import markets. Mechanism test suggests that climate policy uncertainty drives firms toward import substitution strategies to mitigate environmental risks by increasing local production costs and reducing investment incentives. Further analysis shows that climate policy uncertainty also significantly reduces export competitiveness in high-pollution industries. Amid growing global concerns over environmental protection and climate issues, this research not only provides insights into the complex interactions between climate policies and international trade, but also offers policy implications for climate and trade policy.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102096"},"PeriodicalIF":3.4,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145737301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Chinese government has implemented Vocational Skills Training through Public Employment Services (VST-PES) to facilitate rural labor’s off-farm employment participation and quality. However, the empirical evidence on the effectiveness of these initiatives remains limited. This study investigates the implementation of VST-PES in rural China and assesses its impact on rural labor’s off-farm employment participation rate and quality. Using the 2023 data of 4447 rural labor from a national representative sample across 100 villages in 5 provinces, we employ Probit/OLS regression, Propensity Score Matching method, and Heckman two-step model. The results consistently reveal that VST-PES implementation in rural China suffered from limited coverage, short duration, inadequate incentives, and supply-demand mismatches. While VST-PES significantly increased off-farm employment participation rate, particularly for females and middle-aged rural labor, it had no significant impact on off-farm employment quality. These findings suggest that the Chinese government should enhance the implementation of VST-PES in rural areas to increase the inclusiveness of labor market and pay high attention to improve its effects on off-farm employment quality among rural labor.
{"title":"The impact of Vocational Skills Training of Public Employment Services on off-farm employment: Evidence from rural China","authors":"Xuanye Zeng , Yunli Bai , Jiaojiao Wu , Yutong Qiu , Linxiu Zhang","doi":"10.1016/j.asieco.2025.102095","DOIUrl":"10.1016/j.asieco.2025.102095","url":null,"abstract":"<div><div>The Chinese government has implemented Vocational Skills Training through Public Employment Services (VST-PES) to facilitate rural labor’s off-farm employment participation and quality. However, the empirical evidence on the effectiveness of these initiatives remains limited. This study investigates the implementation of VST-PES in rural China and assesses its impact on rural labor’s off-farm employment participation rate and quality. Using the 2023 data of 4447 rural labor from a national representative sample across 100 villages in 5 provinces, we employ Probit/OLS regression, Propensity Score Matching method, and Heckman two-step model. The results consistently reveal that VST-PES implementation in rural China suffered from limited coverage, short duration, inadequate incentives, and supply-demand mismatches. While VST-PES significantly increased off-farm employment participation rate, particularly for females and middle-aged rural labor, it had no significant impact on off-farm employment quality. These findings suggest that the Chinese government should enhance the implementation of VST-PES in rural areas to increase the inclusiveness of labor market and pay high attention to improve its effects on off-farm employment quality among rural labor.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102095"},"PeriodicalIF":3.4,"publicationDate":"2025-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145685475","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01DOI: 10.1016/j.asieco.2025.102083
Qiaochu Li, Yuehan Liu, Qinghe Yang, Jianhui Jian, Tao Li
This study examines how economic policy uncertainty (EPU) affects Environmental, Social, and Governance (ESG) performance. The results demonstrate that EPU reduces overall ESG scores, specifically weakening governance (G) but enhancing social (S) performance, indicating that firms tend to prioritize social initiatives over governance under uncertainty. The effects are moderated by firms’ life cycle, ownership, and cash holdings. Mechanism analyses suggest that EPU reduces ESG performance through heightening investor pessimism, whereas it enhances ESG performance through R&D investments. In addition, stronger ESG lowers stock price crash risk during EPU but slightly reduces firm value. Overall, our findings highlight EPU’s influence on corporate sustainability strategies.
{"title":"Economic policy uncertainty and ESG performance","authors":"Qiaochu Li, Yuehan Liu, Qinghe Yang, Jianhui Jian, Tao Li","doi":"10.1016/j.asieco.2025.102083","DOIUrl":"10.1016/j.asieco.2025.102083","url":null,"abstract":"<div><div>This study examines how economic policy uncertainty (EPU) affects Environmental, Social, and Governance (ESG) performance. The results demonstrate that EPU reduces overall ESG scores, specifically weakening governance (G) but enhancing social (S) performance, indicating that firms tend to prioritize social initiatives over governance under uncertainty. The effects are moderated by firms’ life cycle, ownership, and cash holdings. Mechanism analyses suggest that EPU reduces ESG performance through heightening investor pessimism, whereas it enhances ESG performance through R&D investments. In addition, stronger ESG lowers stock price crash risk during EPU but slightly reduces firm value. Overall, our findings highlight EPU’s influence on corporate sustainability strategies.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102083"},"PeriodicalIF":3.4,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145623804","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-27DOI: 10.1016/j.asieco.2025.102085
Jing Li , Huilin Mao , Zhongyu Sun , YunZhong Li
This paper explores the effect of cultural policy interventions on rural education investment using a difference-in-difference (DID) approach and household microdata. We found that the Change Social Practices and Customs (CSPC) policy significantly increased educational investment in rural children, with educational spending in pilot areas being 62.7 % higher than in non-pilot areas. This effect is more pronounced for boys, multi-child families, and in areas with a stronger clan culture. Our findings indicate that the policy can reduce the pressure of bride price payments and, by decreasing competitive saving within households, enhance the education premium in the marriage market, thereby increasing educational expenditures for children. This research offers new insights into the cultural dynamics influencing rural educational investment and its implications for narrowing the educational disparities between rural and urban areas, thereby supporting educational equity.
{"title":"Bridging the gap: How cultural interventions boost rural educational expenditure","authors":"Jing Li , Huilin Mao , Zhongyu Sun , YunZhong Li","doi":"10.1016/j.asieco.2025.102085","DOIUrl":"10.1016/j.asieco.2025.102085","url":null,"abstract":"<div><div>This paper explores the effect of cultural policy interventions on rural education investment using a difference-in-difference (DID) approach and household microdata. We found that the Change Social Practices and Customs (CSPC) policy significantly increased educational investment in rural children, with educational spending in pilot areas being 62.7 % higher than in non-pilot areas. This effect is more pronounced for boys, multi-child families, and in areas with a stronger clan culture. Our findings indicate that the policy can reduce the pressure of bride price payments and, by decreasing competitive saving within households, enhance the education premium in the marriage market, thereby increasing educational expenditures for children. This research offers new insights into the cultural dynamics influencing rural educational investment and its implications for narrowing the educational disparities between rural and urban areas, thereby supporting educational equity.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102085"},"PeriodicalIF":3.4,"publicationDate":"2025-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145617102","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-27DOI: 10.1016/j.asieco.2025.102088
Le Wen , Abdelrahman Ali , Zhipeng Zhou
This study investigates the impact of rising housing rents on marriage formation among migrants in urban China, a pressing issue in the context of the country's rapid urbanization and escalating housing market pressures. Using data from the multi-year China Migrants Dynamic Survey (CMDS), we adopt an instrumental variable (IV) approach to address potential endogeneity and mainly assess how increasing rental costs affect the timing of marriage and spouse selection among migrants. Our empirical findings reveal that rising housing rents significantly delay migrants' marriages and decrease their likelihood of marrying a native spouse. Specifically, a 10 % increase in housing rents postpones marriage by approximately half a year and decreases the likelihood of marrying a native spouse by 5.837 percentage points. These effects are more pronounced among lower-income and inter-provincial migrants. Besides, the delaying effect of rising rents is stronger for male migrants and for those who eventually marry native spouses. Moreover, rising rents significantly lower the overall likelihood of marriage entry among migrants. The study highlights the need to improve housing affordability and implement targeted support measures for vulnerable migrant populations to alleviate these impacts and promote more inclusive urban development.
{"title":"Rising housing rents and migrants' marriage formation: Evidence from China","authors":"Le Wen , Abdelrahman Ali , Zhipeng Zhou","doi":"10.1016/j.asieco.2025.102088","DOIUrl":"10.1016/j.asieco.2025.102088","url":null,"abstract":"<div><div>This study investigates the impact of rising housing rents on marriage formation among migrants in urban China, a pressing issue in the context of the country's rapid urbanization and escalating housing market pressures. Using data from the multi-year China Migrants Dynamic Survey (CMDS), we adopt an instrumental variable (IV) approach to address potential endogeneity and mainly assess how increasing rental costs affect the timing of marriage and spouse selection among migrants. Our empirical findings reveal that rising housing rents significantly delay migrants' marriages and decrease their likelihood of marrying a native spouse. Specifically, a 10 % increase in housing rents postpones marriage by approximately half a year and decreases the likelihood of marrying a native spouse by 5.837 percentage points. These effects are more pronounced among lower-income and inter-provincial migrants. Besides, the delaying effect of rising rents is stronger for male migrants and for those who eventually marry native spouses. Moreover, rising rents significantly lower the overall likelihood of marriage entry among migrants. The study highlights the need to improve housing affordability and implement targeted support measures for vulnerable migrant populations to alleviate these impacts and promote more inclusive urban development.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102088"},"PeriodicalIF":3.4,"publicationDate":"2025-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145685476","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-26DOI: 10.1016/j.asieco.2025.102087
Huilong Liu , Yifei Wang , Jing Xie , Jun Yin
Leveraging a judicial reform in China as a quasi-natural experiment, this study employs a staggered difference-in-differences (DiD) design to investigate the causal effect of judicial independence on firm-level labor share. The results indicate that enhanced judicial independence increases labor share by 7.65 % relative to the standard deviation. This effect is driven primarily by improved labor rights protection rather than changes in labor demand. Heterogeneity analyses reveal stronger impacts in regions with weaker legal environments, labor-intensive industries, non-state-owned enterprises (non-SOEs), firms with higher proportions of low-skilled employees, and reform implementation with greater intensity. The reform also reduces intra-firm wage gaps and inter-firm labor share disparities. These findings underscore the importance of judicial independence as a critical institutional mechanism for promoting more equitable income distribution.
{"title":"Judicial independence and firms’ labor share: Evidence from a quasi-natural experiment in China","authors":"Huilong Liu , Yifei Wang , Jing Xie , Jun Yin","doi":"10.1016/j.asieco.2025.102087","DOIUrl":"10.1016/j.asieco.2025.102087","url":null,"abstract":"<div><div>Leveraging a judicial reform in China as a quasi-natural experiment, this study employs a staggered difference-in-differences (DiD) design to investigate the causal effect of judicial independence on firm-level labor share. The results indicate that enhanced judicial independence increases labor share by 7.65 % relative to the standard deviation. This effect is driven primarily by improved labor rights protection rather than changes in labor demand. Heterogeneity analyses reveal stronger impacts in regions with weaker legal environments, labor-intensive industries, non-state-owned enterprises (non-SOEs), firms with higher proportions of low-skilled employees, and reform implementation with greater intensity. The reform also reduces intra-firm wage gaps and inter-firm labor share disparities. These findings underscore the importance of judicial independence as a critical institutional mechanism for promoting more equitable income distribution.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102087"},"PeriodicalIF":3.4,"publicationDate":"2025-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145617101","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-26DOI: 10.1016/j.asieco.2025.102086
Jiaxuan Li , Shuzhen Liang , Yongwei Ye , Changjian Chen
Although extant studies have explored the determinants of corporate human capital upgrading based on multiple perspectives, it is unclear whether and how market competition affects corporate human capital upgrading. We conduct a difference-in-difference regression by employing the enactment of China’s Anti-Monopoly Law (AML) in 2008 as a quasi-natural experiment that exposes monopolies to increased market competition. The results show that high-monopolistic firms hire more highly skilled employees after the enactment of the AML, particularly for state-owned firms, firms operating in regions with high market segmentation, firms with low R&D intensity. Further evidence suggests that the possible channel behind this positive effect is that the heightened market competition led by the AML, incentivizes monopoly firms to increase the investment in human capital and the demand for employees with high skills. In addition, we further find that the enactment of the AML increases firms’ labor income share, labor productivity, total factor productivity, and profitability. Our study highlights the crucial role of the AML in promoting corporate human capital upgrading.
{"title":"Product market competition and corporate human capital upgrading: Evidence from China’s Anti-Monopoly Law","authors":"Jiaxuan Li , Shuzhen Liang , Yongwei Ye , Changjian Chen","doi":"10.1016/j.asieco.2025.102086","DOIUrl":"10.1016/j.asieco.2025.102086","url":null,"abstract":"<div><div>Although extant studies have explored the determinants of corporate human capital upgrading based on multiple perspectives, it is unclear whether and how market competition affects corporate human capital upgrading. We conduct a difference-in-difference regression by employing the enactment of China’s Anti-Monopoly Law (AML) in 2008 as a quasi-natural experiment that exposes monopolies to increased market competition. The results show that high-monopolistic firms hire more highly skilled employees after the enactment of the AML, particularly for state-owned firms, firms operating in regions with high market segmentation, firms with low R&D intensity. Further evidence suggests that the possible channel behind this positive effect is that the heightened market competition led by the AML, incentivizes monopoly firms to increase the investment in human capital and the demand for employees with high skills. In addition, we further find that the enactment of the AML increases firms’ labor income share, labor productivity, total factor productivity, and profitability. Our study highlights the crucial role of the AML in promoting corporate human capital upgrading.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102086"},"PeriodicalIF":3.4,"publicationDate":"2025-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145617175","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-26DOI: 10.1016/j.asieco.2025.102084
Angela C. Chao, Jiayi Tao, Jichi Tian
In pursuit of sustainable development, it is essential for firms to integrate environmental social responsibility into their core strategies. This study investigates the impact mechanism of environmental corporate social responsibility on firm growth in an oligopolistic market under regulatory pressure, based on three corporate environmental governance strategies: front-end prevention, end-of-pipe control, and comprehensive governance. The findings indicate that firms without environmental governance practices may face greater market risks and more likely to be eliminated compared to those actively engaged in such practices. This insight provides valuable guidance for firms to deepen understand social responsibility and make informed environmental governance decisions, and for policymakers to develop more effective environmental governance strategies.
{"title":"Environmental governance and CSR: Dilemma or plausibility?","authors":"Angela C. Chao, Jiayi Tao, Jichi Tian","doi":"10.1016/j.asieco.2025.102084","DOIUrl":"10.1016/j.asieco.2025.102084","url":null,"abstract":"<div><div>In pursuit of sustainable development, it is essential for firms to integrate environmental social responsibility into their core strategies. This study investigates the impact mechanism of environmental corporate social responsibility on firm growth in an oligopolistic market under regulatory pressure, based on three corporate environmental governance strategies: front-end prevention, end-of-pipe control, and comprehensive governance. The findings indicate that firms without environmental governance practices may face greater market risks and more likely to be eliminated compared to those actively engaged in such practices. This insight provides valuable guidance for firms to deepen understand social responsibility and make informed environmental governance decisions, and for policymakers to develop more effective environmental governance strategies.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102084"},"PeriodicalIF":3.4,"publicationDate":"2025-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145737300","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-22DOI: 10.1016/j.asieco.2025.102075
Liang Chang , Bingyan Zheng , Na Tan , Haobin Zheng
This study investigates how financial constraints affect firms’ environmental decisions and how costly the resulting social externalities are in emerging economies. Using a novel text-based index of financial constraints and data on Chinese listed firms from 2000 to 2020, we find that greater financial constraints significantly reduce firms’ environmental investment. The impact is more pronounced for non-SOEs and manifests more strongly in regions with lower public environmental concern and stricter regulation intensity. Exploiting the policy shock of China’s Property Rights Law in 2007, we find that firms affected by the law have a higher degree of financial constraint mitigation and increase their environmental investments by about 24 % on average. This investment increase potentially reduces the probability of environmental penalties by 3 % and penalty amounts by 0.07–0.22 million yuan per firm, while potentially increasing the firm’s market value by 0.96–1.92 billion yuan and avoiding social losses of 3.1–9.5 million yuan.
{"title":"Unlocking green capital: Financial constraints and environmental investments in China","authors":"Liang Chang , Bingyan Zheng , Na Tan , Haobin Zheng","doi":"10.1016/j.asieco.2025.102075","DOIUrl":"10.1016/j.asieco.2025.102075","url":null,"abstract":"<div><div>This study investigates how financial constraints affect firms’ environmental decisions and how costly the resulting social externalities are in emerging economies. Using a novel text-based index of financial constraints and data on Chinese listed firms from 2000 to 2020, we find that greater financial constraints significantly reduce firms’ environmental investment. The impact is more pronounced for non-SOEs and manifests more strongly in regions with lower public environmental concern and stricter regulation intensity. Exploiting the policy shock of China’s Property Rights Law in 2007, we find that firms affected by the law have a higher degree of financial constraint mitigation and increase their environmental investments by about 24 % on average. This investment increase potentially reduces the probability of environmental penalties by 3 % and penalty amounts by 0.07–0.22 million yuan per firm, while potentially increasing the firm’s market value by 0.96–1.92 billion yuan and avoiding social losses of 3.1–9.5 million yuan.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102075"},"PeriodicalIF":3.4,"publicationDate":"2025-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145600358","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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